How to choose a business broker in the UK — and negotiate the terms
Business brokerage is not a regulated profession in the UK. Anyone can set up as a broker tomorrow, and the quality range is enormous. Most owners sell a business once, sign the first agreement put in front of them, and only discover what they agreed to when they try to leave. This guide covers how to choose, what the terms actually mean, and which of them are negotiable.
The short answer
Judge a broker on completed sales in your sector at your size, on how they will actually find buyers, and on how they are paid. Expect commission of roughly 3%–10% of the sale price with a minimum fee, and treat the tie-in length, upfront fee, exclusivity and tail clause as negotiable — because they are.
Choosing: what actually matters
Completed deals, not listings. Any broker can show you businesses they are marketing. Ask how many they completed in the last twelve months, in your sector, at your size — and ask for two sellers you can call.
Who they will approach, and how. There is a real difference between listing on a portal and waiting, and researching and directly approaching named trade buyers, consolidators and private equity. The second is far more likely to produce a strategic buyer paying a strategic price. Ask what the buyer search actually consists of.
Who does the work. Often the person who pitches is not the person who handles the sale. Ask who your day-to-day contact will be and how many mandates they carry at once.
The quality of the information memorandum. Ask to see a redacted example. A thin IM produces low, poorly informed offers and a diligence process full of surprises.
How they handle the asking price. A broker who quotes a headline figure without asking searching questions about maintainable earnings is pitching, not valuing. See is my broker's valuation accurate?
The terms — and what's negotiable
Commission rate and structure. Typically 3%–10% for SME sales, higher percentages on smaller deals. Consider a ratchet: a base rate up to your independent valuation, and a higher rate on everything above it. That aligns the broker with getting the best price rather than the fastest one.
Minimum fee. Almost universal. Check the figure against a realistic worst-case sale price, not the optimistic one in the pitch.
Upfront and marketing fees. Ask precisely what the fee buys, and ask for it to be credited against commission on completion. Many brokers will agree to that if asked; almost none volunteer it.
Tie-in period and rollover. Sole agency commonly runs 6–12 months and often rolls over automatically. Ask for a shorter initial term with an option to extend, and replace automatic rollover with active renewal.
Exclusivity carve-outs. If you already have live conversations — a competitor who has approached you, your management team, a family member — name them as excluded parties before you sign. Otherwise you can end up paying full commission on a buyer you found yourself.
Tail / introduction clause. Fair in principle: the broker should be paid for a buyer they introduced. Limit it to 6–12 months after termination and to buyers on a written, named introduction list provided to you.
Termination rights. Know what notice you must give and what remains payable. Also confirm what happens if the sale completes on deferred consideration or an earn-out — commission on money you haven't received yet is a genuine cash-flow problem.
Definition of the sale price. Confirm whether commission is calculated on enterprise value, on total consideration including earn-out, or on cash received at completion. The difference can be tens of thousands.
Red flags
- —A valuation quoted before they have seen full accounts.
- —A large upfront fee with no clear deliverable and no credit against commission.
- —Pressure to sign on the first meeting, or a 'today only' discount.
- —Reluctance to name completed deals or provide seller references.
- —A tie-in over twelve months with automatic rollover.
- —An open-ended tail clause with no named introduction list.
- —No written buyer search strategy beyond listing on portals.
Get the price settled before you appoint
The strongest position an owner can be in is to walk into broker meetings already knowing what the business is worth, with a written report behind the figure. It changes the conversation: you're assessing how a broker will achieve a defensible price rather than being sold an aspirational one.
We spent over a decade in brokerage before founding The Business Valuers, and we don't sell businesses — so we can value the company, source and shortlist brokers suited to your sector and size, and negotiate the engagement terms on your behalf. Where you go on to sell through a broker we introduce or work alongside, our fee is frequently absorbed or credited against their commission at completion. See how that works.
Common questions
What commission do UK business brokers charge?
Typically 3%–10% of the sale price for SME transactions, with smaller deals at the higher end and a minimum fee applied. Upfront and marketing fees are common on top.
How long is a typical tie-in period?
Usually 6–12 months, often with automatic rollover. A shorter initial term with an option to extend is commonly agreed if you ask for it.
What is a tail clause?
Commission still payable after the agreement ends if you sell to a buyer the broker introduced. Cap it in time and tie it to a written list of named introductions.
Should I pay an upfront fee?
Only where it buys genuine upfront work — a proper IM and real buyer research — and ideally only where it is credited against commission at completion.
Are business brokers regulated in the UK?
No. There is no licensing requirement and no compulsory redress scheme, so references, completed-deal evidence and careful reading of the terms do the work that regulation would otherwise do.
The Business Valuers provides independent, fixed-fee valuations for UK SMEs. We are not a broker and take no commission on any sale. Fee and term ranges above are general market observations, not advice on any specific agreement.